its high-performing employees who are focused on giving target
customers what they want. Key performance factors are explored
including clear mission and strategy, selection and training,
corporate culture, communications and information, and rewards.
Herein lies a dilemma. While a company's leaders
may devise the strategy, it is employees \u00b1 all of them \u00b1
who will implement the strategy. It is ironic that, even
though more people now agree that employees are
important, company leadership continues to focus on
a wide separation between managers and the rest of the
employees, reinforcing an ``us and them'' attitude.
Managers often have private dining rooms; employees
do not. Managers sometimes get stock options;
even before our customers.'' They can hold this belief
because they know their employees take care of
customers in the ``right way'' \u00b1 they understand what
are profitable for both the customers and the company. It is essential that employees be able and willing to foster these relationships over time.
Employees who do this are valuable and, hopefully,
loyal. They like their jobs and plan to stay with the
company. Some turnover is desirable, of course, as it
removes those who are not able or willing to serve
customers as the strategy requires. For example, Cisco
Systems trims the bottom 5 percent of its employees each year. The ones who go are those who do not add value (based on objective performance measures) or do not fit the culture. At Southwest Airlines and Nucor Steel,
Cultivating loyal employees who serve customers well is financially sound. Studies have shown that companies that emphasize developing and retaining employees have better results than companies that do not. They have
There is other evidence that loyal employees add to the value of a company. Attracting and retaining the very best people is one of the eight most important things that
investors use when judging the value of a company,
according to research by Ernst & Young. Looking at it
from the other side, over 50 percent of the respondents
in a Mercer Management Consulting study said that
poor customer service and lost customers are the result
of not being able to attract and retain the right people.
human performance as more important strategically
than productivity and technology. Attracting and
retaining people will be the No. 1 issue in strategy by
2010, according to 80 percent of these managers.
Internet companies say that attracting and retaining the
right people is the primary issue for them already.
difficulty in, attracting and retaining the right people is the decreasing loyalty and commitment of employees in every age, income group, job classification, and industry. Loyalty, or commitment to the company, has been
companies for as little as 10 percent more pay. More
than 50 percent would leave if they could earn a 20
percent increase. These data indicate all-time lows in
company loyalty, which is mostly attributable to people
tools and behaviors that interact to create high-
performing, loyal employees. Key among them are:
mission and strategy, selection and training, company
culture, communication and information, and rewards.
With the right mix of these factors, you can develop a
workforce that has the skills and commitment to help
your company succeed (see Exhibit 1).
in the long run, result in attractive financial returns,
hence loyal investors. However, this factor is also
inextricably connected to having committed, high-
purpose has a very
high probability of
People prefer to work
for companies that are
It gives them
satisfaction to be a part
of that success. A clear
mission and strategy
also help employees to
better understand their
Goals are easier to set,
and accountability for
individual and team
goals is easier to
establish and monitor.
study concluded that a
company's ability to
stay competitive, or
competitive, is a major factor in increasing the commitment of employees. There usually are positive financial outcomes for employees if a company continues to be competitive and successful. If employees are allowed to use their skills and to participate in making the changes that maintain
There are many examples of companies that have been able to get everything right and have achieved a long-term ROI way above industry averages: Lexus,
Companies like Southwest Airlines, Dell Computer, and Enterprise Rent-A-Car have done much research to determine what it takes to succeed within their
companies. In addition to functional and technical skills, these companies identify the personal characteristics and interpersonal skills that are related to success. Among other things, Southwest Airlines employees must be
creative and thrive in a team atmosphere. Employees at Dell Computer must be able to work well on teams, have a high tolerance for ambiguity and change, and be able to learn rapidly. Enterprise Rent-A-Car uses an
intelligence. The 15-
item EQ uses situational
questions to assess self-
and empathy. Supplies
Network, a very
successful and growing
pick up the phone and
initiate a conversation
impatient, so they will
ask for the sale; [and]
non-conformist, so they
here, plus many others,
a reputation goes a long way in attracting the people
these companies want. Because these companies have
clearly defined mission and strategy and understand
what it takes to succeed, they can identify and recruit
candidates more successfully.
Pay is usually relatively good at these companies; if
not beginning pay, then opportunities for advancement
are available and pay is tied to performance, so a new
hire can earn significant total compensation. For
``It is ironic
that, even though more
people now agree that employees
are important, company leadership
continues to focus on only some
of its employees \u00b1 the
Now bringing you back...
Please enter your email address below to reset your password. We will send you an email with instructions on how to continue.
Does that email address look wrong? Try again with a different email.
This action might not be possible to undo. Are you sure you want to continue?